Predatory lending bill pending in Rhode Island

Bill would protect consumers from unusually expensive loans

The real estate industry has done well during the last five years thanks to housing prices that have reached record levels. The lending industry has done well, too, as they have arranged to help consumers pay for these expensive houses. Creative types of mortgages have made it possible for nearly anyone to find a way to buy a house.

While it’s great that Americans of all walks of life are able to own a home, the problem of predatory lending has also grown considerably during the last five years. The term has no specific meaning, but generally applies to lending practices that either add large or questionable fees to home loans or those which charge interest rates that are substantially higher than average.

While there is some flexibility in interest rates and fees based upon the borrower’s particular credit score, predatory lending is a practice that seeks to take advantage of borrowers who may not qualify for better rates.

The state of Rhode Island has become the latest state to take on the issue, as it is one of only two states in New England that does not protect consumers from predatory lending.